The huge storm that hit the east coast of Australia this past weekend destroyed the contention of global warming deniers that we don't have a problem ! That intense low created a storm surge that combined with a king tide to bring the ocean into the living rooms of luxury homes that fronted onto beaches.
Typical was the Sydney northern beaches suburb of Collaroy. For over a century the most sought after - and expensive - homes are those where you step out of the grassy backyard - onto the beach. At the height of the storm the sea crashed inland with almost unbelievable ferocity, tearing away the backyard soil and undermining the foundations of many homes. In-ground swimming pools were dragged onto the beach in the back-wash and walls collapsed.
Pre this weekend, the value of those homes ranged around $ 4.8 million - and some were just days away from going to auction. Now their very existence becomes a querie ! Many councils refused permission for rock wall protection from surges before this storm. It is quite possible that demolition may be required - and rebuilding consent withdrawn.
Worse still, on the Gold Coast many high rise housing units are right on the beach. Imagine the predicament of people with a huge mortgage to secure the luxury living they craved - only to face the prospect of the building being destroyed in a future storm. In the face of this disaster, many buyers will certainly hesitate and the value of beach frontage properties may drop sharply.
Ever since global warming and rising sea levels became an issue the various licensing authorities have been whistling in the dark and ignoring the problem. If the pundits are correct, a lot of Australian suburbia is going to be under water a few decades from now. No doubt the legal position of councils that signed off on building approvals will invite claims for compensation and a disaster of this magnitude will certainly require a national response.
The immediate aftermath will be brutal. On the stock exchange the share price of leading insurance companies dropped sharply as the magnitude of claims became evident. In inland Australia the deluge caused rivers to rise and already those living on flood plains are finding flood insurance both costly and difficult to obtain. The number of people without insurance is increasing - because it is simply unaffordable - and it is an item of discretionary spending. It may need to be automatic cover with the insurance held by the local council and the premium added to the rating system.
The cost of this storm event is still to be calculated, but apart from the damage to homes, shops and factories the loss of motor vehicles will be huge. Basically, if the modern car is simply immersed in water but otherwise undamaged - it is a write off. The old clunkers of the early twentieth century were crude and rugged. Let them dry out and give them a clean - and they survived floods. Today's automobiles are so complex that inundation delivers terminal damage.
This weekends storm magnified the risk factor we face from damage to our homes and our cars.
There is the expectation that not only will premiums increase but new conditions may be applied to the cover offered. Homes at very high risk may not be accepted for insurance cover and conditions imposed on vehicle insurance.
Many cars were lost in this flood event when drivers ignored road closed signs and attempted to drive through floods. In fact, three lives were lost in New South Wales when cars were swept away. Perhaps insurance cover may cease once the authorities close and signpost a road - and those that ignore that closure do so at their own risk.
This storm delivered a wake-up call. It seems that we can expect change as a result !
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